India and Pakistan in first substantive talks since Mumbai

NEW DELHI (Reuters) - India and Pakistan next week take the first step in trying to revive a peace process broken off after the 2008 Mumbai attacks, but no one is realistically expecting dramatic progress.

The meeting comes at a time when India has sent in the army to control weeks of violent anti-government protests in the Himalayan region of Kashmir, at the core of its dispute with Pakistan.

The July 15 talks between the foreign ministers could see them framing a new format to replace a broad 2004 peace process, known as the composite dialogue, which India suspended after the Mumbai attacks which it blamed on Pakistan-based militants.

That new format could free up the peace process from a political bind: India could not be seen as reviving the old peace process until Pakistan punished the planners of the Mumbai attack which killed 166 people, a demand Islamabad has yet to meet.

At the same time, both sides have been under pressure from Washington to reduce tension because their rivalry spills over into Afghanistan and complicates efforts to bring peace there.

Before the 2004 talks stalled, they came close to agreement under the composite dialogue on a maritime border dispute in the area of Sir Creek estuary and on the Siachen glacier in the Himalayas.

"I think the old composite dialogue which had eight issues is dead," said Lalit Mansingh, a former Indian foreign secretary.

"They will probably come up with a new format that will include new issues such as water sharing (from common rivers) that Pakistan will want to raise."

KASHMIR PROTESTS

But given their unmitigated mistrust of each other since gaining independence from Britain in 1947, no one is expecting rapid progress in the talks.

And Foreign Minister S.M. Krishna and his Pakistani counterpart, Shah Mehmood Qureshi, will have to sidestep another danger -- getting bogged down in a blame game over ongoing anti-government protests in a part of Kashmir held by India.

Violent anti-government protests have swept India-controlled Kashmir for almost a month. The region is under an army lockdown.

The nuclear-armed rivals fought two of their three wars over Kashmir, which they claim in full but control in part. A separatist revolt broke out in the Indian held part in 1989, a conflict New Delhi says is fuelled by Pakistan.

Islamabad says it only lends moral support to what it calls an independence movement by Kashmiris.

In comments that could reverberate in the talks, Indian officials said the protests may have been incited by Pakistan-based Lashkar-e-Taiba militant group that Delhi has blamed for the Mumbai attacks.

Pakistan too has signalled its intention to rake up the Kashmir issue which Islamabad says is the core dispute whose resolution holds the key to peace between the two countries.

"All issues will be discussed," Pakistani Foreign Ministry spokesman Abdul Basit said. "We're concerned about the deteriorating situation there."

But the Kashmir protests may only remain on the margins of next week's meeting because the damage from raking up the issue may outweigh the long-term benefits of fruitful talks.

"It will be raised. That's it," Hassan Askari Rizvi, a Pakistan-based analyst on defence and foreign affairs.

"The escalation in violence won't be centre focus."

(Additional reporting by Kamran Haider in Islamabad; Editing by Paul de Bendern and Nick Macfie)